There is hardly any doubt that the oil commodity market is one of the most lucrative markets in the world. This is evident by the level of economic growth experienced by oil producing countries around the globe. Countries like Saudi Arabia have grown with unprecedented speed to become economic giants of the Middle East. On the flip side, oil is always at the top of the expenditure lists for countries that are non producers. But the problem is that the oil commodity market is also the most unstable. In fact, in recent years oil prices have taken on an unprecedented rise. So how can we tame oil prices in a sustainable manner? Your Personal Financial Mentor gives an insight on how oil commodity market prices can be tamed.
One of them is technology. Improvement in technology has always led to reduction in the cost of production. And while most sectors have embraced technology such as software, the oil commodity market is still lurking vey far behind. Market players have complained that the initial cost of buying new technology is very high, but actually the problem is that many are fixed upon short term profits rather than long term solutions. The huge problem now is that consumers are the ones to carry this burden.
And if there is one problem that has been one of the biggest contributors to the instability of the oil market, it is the civil unrest in the oil producing world. Every day on the news there are reports about unrest in the Middle East or North Africa. It seems, for these countries oil and has is more of a curse than a blessing. And whenever civil war starts in an oil producing country, the results are felt immediately. Prices shoot through the roof overnight. Therefore, if the problem of oil commodity market prices is to be solved at all, the world has to show a willingness to help these oil producing countries solve their domestic issues. Needless to say, the problem itself stems from mismanagement of oils resources.
Many people don’t like to hear this, but it’s about time the world started exploring alternative sources of energy. We have tried nuclear energy, but we need to try other safer sources, which are less costly in the long run. The hard truth is that oil and gas are non renewable and in no time, there won’t be enough for the world. The world should therefore be more aggressive with bio fuel, rather than relying on gas and oil.
Categories: Oil Commodity Market